Written answers

Tuesday, 14 July 2015

Department of Public Expenditure and Reform

Pension Provisions

Photo of Tommy BroughanTommy Broughan (Dublin North East, Independent)
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318. To ask the Minister for Public Expenditure and Reform the estimated savings to the Exchequer if pension payments to previous Ministers were reduced by 10%; and if he will make a statement on the matter. [28352/15]

Photo of Gabrielle McFaddenGabrielle McFadden (Longford-Westmeath, Fine Gael)
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331. To ask the Minister for Public Expenditure and Reform in the context of the emergency legislation enacted to impose cuts on the public sector from 2012, if there are any legislative options which can be explored to ensure that former Ministers are excluded from pension increases; and if he will make a statement on the matter. [28688/15]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 318 and 331 together.

I strongly share the view that the pensions of many former Office Holders are very high. However, the pension levels paid to former office holders are based on their salaries at the point of departure agreed and implemented by previous Governments. The Courts view pensions as vested property rights. As Minister, I am required to work within the constitutional and statutory legal framework under which all Irish Governments operate.

The Financial Emergency Measures in the Public Interest (FEMPI) Acts, including the FEMPI 2010 Act which imposed the Public Service Pension Reduction (PSPR) on public servants in receipt of public service pensions, owe their constitutional legitimacy to the presence of an overriding public interest, in this case the fiscal crisis, and because they are very general in application, fair and proportionate.  

This is the legal basis for the reductions in pensions applicable to former members and office holders of the Houses of the Oireachtas.  The Deputy will be aware that this Government in 2012 increased the PSPR applied to that amount of pension in excess of €100,000 from the 12% enacted by the previous administration to 20%, and further increased it to 28% under the 2013 Act,  for those who have retired before March 2012. Under the recently announced proposals for the reduction of PSPR this 28% rate continues to apply.

However, I am advised that this legislation cannot selectively penalise a particular cohort of public service pensioners. Accordingly, all public service pensioners will be  subject to the reduction in lower rates but I have ensured that the proposals I made to Government to reduce the impact of PSPR will significantly favour low paid public service pensioners.  Effectively the most any public service pensioner can benefit irrespective of pension is capped at €400, €500 and €780 in each of the years to 2018. 

In 2014 payments totalling €3,654,941.48 in respect of Officeholders pensions were paid to 119 former Ministers. A 10% reduction in this figure would potentially realise savings of €365,494.15 in a full calendar year.  As noted above however, any legislation to implement such a reduction effectively would have to meet the legal constitutional requirements set out above. 

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